Beta-Casein is the major milk protein synthesized by the mammary gland during lactation. Casein gene expression is regulated both positively and negatively by the complex interaction of peptide and steroid hormones. Beta-Casein gene expression can be induced by prolactin, glucocorticoid, and insulin, but is inhibited by progesterone. Since regulation of transcription involves specific interactions of the trans- acting factors with regulatory DNA elements, we examined nuclear factors that interact with the mouse Beta-casein promoter region during the development of the mammary gland by gel mobility shift assays using various probes that represent different portions of the promoter region. Our results indicated the presence of a mammary gland-specific binding protein with a mol wt. of 65 KD. This factor binds to a palindromic sequence, 5'-TGAT/ATCA-3', located at position -9/+4 and -363/-349. This factor has been detected in mammary tissue during pregnancy but not the virginal or lactational periods, and is termed pregnancy-specific mammary nuclear factor (PMF). The biological significance of PMF and its binding elements for casein gene transcription was examined by transfection experiments of Beta-casein promoter-CAT chimeric gene into mammary epithelial cells. Progesterone-mediated repression of transcription was derepressed by co-transfection with an oligo nucleotide containing the PMF binding site. Furthermore, mutation in PMF binding sites abolished the inhibitory effect of progesterone, whereas the mutant was still able to respond to the induction by lactogenic hormones. These results suggest that PMF is important for the repression of Beta-casein transcription by progesterone. To investigate whether the pregnancy-specific appearance of PMF is related to the increased serum level of progesterone, ovariectomy of pregnant mice and hormone replacement studies were performed. These studies showed that after ovariectomy the binding activity of PMF in the mammary gland was reduced to a very low level and that progesterone replacement specifically prevented the loss of PMF-binding activity. The changes in PMF activity were also inversely correlated with the alterations in casein gene expression in the tissue. The above results suggest that the repression of Beta-casein transcription by progesterone during pregnancy is mediated, at least in part, via PMF whose appearance is regulated by progesterone in the mammary gland.